December 17, 2018 AtoZ Markets – In an escalating step, the financial regulators in Hong Kong will reportedly tighten their grip on cryptocurrencies, amid news of their intention to put exchanges' traders and other pertinent firms under the surveillance of the Securities and Futures Commission, as the media reported today, Dec., 17th.
Secluding itself from the comprehensive ban on cryptocurrency and all related activities China has imposed, Hong Kong seems to have become a booming venue for initial coin offerings ICOs, the thing that sounded a warning whistle for regulators in the country, under concerns of fraud and manipulation.
Investment funds therefore are required to obtain a licence as the SFC's guidelines dictate, if 10% of the assets they manage are made up of bitcoin or other cryptocurrencies, with a permission to sell related products to professional investors only, as per the reports.
The voluntary scheme provides a "regulatory sandbox" in where exchanges will have the opportunity to test virtual currency products or services, which will help them make a better judgment on whether to seek a licence or not.
The business can still continue if it falls under the regulations
The plan that comes in phases also dictates that companies can issue ICOs for tokens falling under the SEC’s approval, which should have had at least 12 months of lifespan.
The regulator sent warning letters to seven local exchanges after it had received complaints from investors, in which they said they were not able to withdraw fiat or cryptocurrency from their accounts, amid accusations of assets misappropriation and market manipulation.
In a strict step, the commission ordered Black Cell Technology last March to halt their ICO, with charging them of carrying out an unauthorized promotional activity.
It is worth mentioning that the recently-held G20 summit witnessed discussions with regard to regulating cryptocurrencies in endeavours to combat money laundering on a global scale.
In a connected news, it is worth reminding that AtoZ Markets reported recently that an internet-based court in China changed its main line to switch to the blockchain domain, for fighting plagiarism and protecting writers’ copyrights.